CWT Traveler

How will the prices for hotels and ground transportation develop in 2019? In the last issue of CWT Traveler, we reported on global market data and price trends for flights. This time, however, we are keeping our feet firmly on the ground. The results are taken from the Global Travel Forecast 2019 published by CWT together with GBTA and with the support of the Carlson Family Foundation.

Hotels: Demand is high
As more people are traveling for business and new, ultra-long-haul flights are introduced, demand for hotel rooms is also increasing. This is true for both Asia and Europe, but here, too, Brexit is causing uncertainty, even if the effects are still hard to predict. On the one hand it could result in poorer service quality, since almost 40 percent of employees in the British hospitality industry are EU citizens. If they are forced to leave, the sector will suffer from a shortage of staff. On the other hand, a drop in sterling could make the country a more attractive shopping destination for global tourists and boost demand for hotel rooms.

The study predicts that midscale hotels will further expand their capacity as demand grows, especially among younger travelers. This will force more upscale hotels and chains at certain destinations to make their prices more competitive. Generally, trends like dynamic pricing, hotel mergers and technical innovations such as automatic check-in are set to continue.

Ground transportation: Prices remain (almost) stable
On a global average, the prices for ground transportation (trains, buses, taxis) are stable. However, car rentals are a different matter: By the fourth quarter of 2019 at the latest, prices are expected to rise – in Germany by almost 5 percent, in the USA by up to 6 percent.

Ride-hailing apps continue to be a strong trend, although they are regulated to a greater or lesser degree in several markets. In London, for example, Uber was only granted a short-term license for 15 months in mid-2018 and is monitored closely by the transport authorities. Other trends like electromobility and connected cars will spread further.

Progress in high-speed railway has stalled in some areas: The high cost of investment means that network expansion is making less headway than expected, at least in Europe. In Asia, the planned Kuala Lumpur-Singapore line may have been put on hold, but China is continuing to push ahead with its projects.

One major challenge for high-speed rail traffic is the limited online offering. Providers of technical solutions need to cooperate more closely with rail companies to make the process of providing information and booking tickets more user-friendly.

In the third and last part of our mini-series, we provide specific recommendations on how to implement what you have learned in your travel policy and your purchasing strategy. So stay in touch!